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Kids
and Learning the Value of Money
Children Under 10 Years Old
Children of all ages love money but
they rarely learn or understand the value of it until they are at the
higher end of this age bracket. It is your job as a parent to
begin to explain the philosophy of money to them. You can begin by
explaining that there is a certain amount of money in your household
each month and that there are certain expenses, such as food, clothing,
house and utilities, that need to be paid from this money. It is
not necessary to go into dollar amounts.
Make them understand that you can not
spend everything that you make and that a portion must be put into a
savings account for emergencies and the future. Teach
them the importance of saving by creating a "family fund" where
you save for something special. It can be as extravagant as a
vacation to Disney World or as small as a night at the movies. In
addition, explain especially to young children, the process of having
the correct amount of money to purchase something that they want.
If your child gets an allowance you
should teach them to save 10 percent, donate a portion and then they can
have the rest for their spending money.
Children Ages 11 -15 Years Old
This is the age where children begin
to have opportunities to earn some real cash and it is important that
they understand the importance of earning an income. At the age of
11 -13 your child can earn money by doing odd jobs and babysitting. When
they reach the age of 14 they can get for working papers and apply to
local retail businesses and restaurants for summer jobs.
This is a good time to take them to a
bank to open up their own savings account and to establish a routine of
putting money into the account with each paycheck. If they start
saving from an early age it is more likely that they will continue this
way of managing money as an adult.
It is important to teach them that
they must use their own money to purchase items that you feel are a want
rather than a need.
Children Ages 16 and Over
By the age of 16 most teenagers have
part-time jobs and are introduced to the concept of paying taxes.
They will learn about paying taxes and doing a tax return.
It is a good time to teach them how
to manage a checking account and use an ATM card. It is beneficial
to them to teach them to plan ahead for major expenses like car
insurance. They should be held more responsible for purchasing
some of their own clothes to help them appreciate the cost involved.
They will learn that sometimes they will need to defer a purchase until
they have enough money.
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